RAJESHWAR GARG, NEW DELHI V. ITO, WARD - 40(1), NEW DELHI

ITA 1219/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6863 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 21-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S R GUPTA
• Keywords: Opportunity of being heard; Non-deduction of tax
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.1219/DEL/2018 ASSESSMENT YEAR : 2014-15 RAJESHWAR GARG, FD-18, PITAMPURA, NEW DELHI -110 013. PAN: AAHPG2886R VS. ITO, WARD-40(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.R. GUPTA, CA DEPARTMENT BY : SHRI ATIQ AHMED, SR. DR DATE OF HEARING : 24.07.2018 DATE OF PRONOUNCEMENT : 25.07.2018 ORDER THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF TH E ORDER PASSED BY THE CIT(A) ON 15.01.2018 IN RELATION TO THE ASSESSMENT YEAR 2014-15. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAIN ST THE CONFIRMATION OF DISALLOWANCE U/S 40(A)(IA) OF THE INCOME-TAX ACT, 1 961. ITA NO.1219/DEL/2018 2 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADI NG OF YARN AND CLOTH AND IS ALSO ACTING AS A COMMISSION AGENT. INTEREST OF RS.3.24 CRORE ON UNSECURED LOANS WAS DEBITED TO THE PROFIT & LOSS ACCOUNT. ON BEING CALLED UPON TO FURNISH THE DETAILS OF TAX DEDUCTION AT SOURCE FROM SUCH INTEREST PAYMENTS, THE ASSESSEE FILED RELEVANT DOCUMENTS. THE ASSESSING O FFICER GOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE IN RESPECT OF THE I NTEREST PAYMENTS EXCEPT OF RS.2,52,000/- PAID TO M/S DARA SINGH, HUF. HE OBSE RVED THAT THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE AS THE RECEIPT OF FO RM NO.15H CAN IMMUNE THE ASSESSEE FROM NON-DEDUCTION OF TAX AT SOURCE ONLY I F THE INCOME OF THE PAYEE IS BELOW THE TAXABLE LIMIT. AS THE ASSESSEE PAID I NTEREST TO M/S DARA SINGH, HUF AMOUNTING TO RS.2,52,000/-, THE ASSESSING OFFIC ER HELD THAT IT WAS LIABLE TO WITHHOLD TAX AT SOURCE FROM SUCH PAYMENT OF INTE REST. INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, THE ASS ESSING OFFICER MADE DISALLOWANCE FOR THE SAME, WHICH CAME TO BE COUNTE NANCED IN THE FIRST APPEAL. 4. I HAVE HEARD BOTH THE SIDES AND PERUSED THE RELE VANT MATERIAL ON RECORD. THE LD. AR CONTENDED THAT THE AUTHORITIES BELOW HAVE FAILED TO TAKE NOTE OF SECOND PROVISO TO SECTION 40(A)(IA) WHICH H AS BEEN INSERTED BY THE ITA NO.1219/DEL/2018 3 FINANCE ACT, 2012 W.E.F. 01.04.2013. IT WAS CONTEN DED THAT THE ASSESSEE HAS NOT BEEN TREATED AS ASSESSEE IN DEFAULT IN TERMS OF SECTION 201(1) AND, HENCE, NO DISALLOWANCE COULD BE MADE U/S 40(A)(IA) IN RESP ECT OF THE PAYMENT OF INTEREST MADE TO M/S DARA SINGH, HUF. I FIND THAT THERE IS NO DISCUSSION IN THE IMPUGNED ORDER ABOUT THE APPLICABILITY OR OTHER WISE OF THE SECOND PROVISO TO SECTION 40(A)(IA). IN THE GIVEN CIRCUMSTANCES, I SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF THE AO TO RE-EXAMINE THE ISSUE IN THE LIGHT OF THE SECOND PROVISO TO SECTION 40(A)(IA), A FTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 5 TH JULY, 2018. SD/- [R.S. SYAL] VICE PRESIDENT DATED, 25 TH JULY, 2018. DK ITA NO.1219/DEL/2018 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.